Economics

In a word, American fiscal governance is broken and broken badly. Owing to the Fed’s massive monetization of the public debt over last several years Washington has lost all sense of the economic costs and consequences of massive borrowing. And that’s because there has been no “crowding out” and no spiraling interest rate signals from the bond pits of the type which historically kept Washington pols close to the fiscal straight and narrow.

The most outrageous breakout of statist excess in US history happened on Donald Trump’s watch with his full complicity. In turn, these Covid-lockdown assaults on normal economic function transformed what was a mediocre economic record during his first 38 months in office into a complete disaster during the last 10 months.

They have done it again, and in a way that makes a flaming mockery of both honest market economics and the so-called rule of law. In effect, the triumvirate of fools at the Fed, Treasury, and FDIC have essentially guaranteed $9 trillion of uninsured bank deposits with no legislative mandate and no capital to make these sweeping promises good.